Venezuela comeback boosts oil

WORLD oil prices surged by almost a dollar a barrel following Venezuelan President Hugo Chavez's return to power at the weekend. His move back to the presidential palace two days after being forced from power by a military coup calmed market nerves over a possible break in policy on crude output quota compliance by the Opec producer.

The latest rally in prices came as it emerged that Gordon Brown will announce a freeze on petrol duty for another year in Wednesday's Budget. Putting up petrol duty in line with inflation would have netted £560m for the Treasury while costing drivers 1.5p per litre.

But the Chancellor is keen to avoid a backlash from fuel protesters at a time when political turmoil in the Middle East threatens to trigger price increases at garage pumps. The freeze is also aimed at softening the blow of across-the-board tax rises tipped to amount to £7bn.

Overnight trading saw US benchmark light crude bounce 92 cents to $24.39 a barrel, almost wiping out Friday's hefty losses. Brent crude futures were expected to follow when trading opened on London's International Petroleum Exchange.

Venezuela's oil exports were today reported to have returned to near normal levels. Crude and refinery production were creeping up as staff at the State oil firm Petroleos de Venezuela returned to work after last week's three-day national strike.